The Indian National Congress Saturday renewed its call for a radically transformed Goods and Services Tax (GST) 2.0, emphasizing the need for simplification and rationalization of the tax structure.
Congress General Secretary Jairam Ramesh today said in a statement that the current GST system has become a “Growth Suppressing Tax” due to multiple rate slabs and exemptions, which have facilitated evasion and increased complexity.
Prime Minister Narendra Modi had Friday announced the introduction of Next-Generation GST reforms by this Diwali, aimed at reducing taxes on daily-use items.
“The government will bring Next Generation GST reforms, which will bring down tax burden on the common man. It will be a Diwali gift for you,” the Prime Minister said in his Independence Day speech, ensuring that these reforms directly benefit citizens and stimulate economic activity.
Demanding drastic reduction in the number of rates to minimize revenue uncertainty for states and eliminate classification disputes, Ramesh has also sought for the extension of cess beyond March 31, 2026, to offset revenue uncertainty arising from rate structure rationalization.
Insisting on a meaningful addressal of widespread concerns of Micro, Small, and Medium Enterprises (MSMEs), including procedural changes and increased thresholds for interstate supplies, Ramesh has asked the government to tackle sector-specific issues in textiles, tourism, exporters, handicrafts, and agricultural inputs.
While asking the government to incentivize states to introduce state-level GST to cover electricity, alcohol, petroleum, and real estate, Ramesh has reemphasized his demand for an official discussion paper on GST 2.0 to facilitate an informed and wider debate on this vital national issue. “GST 2.0 should be truly a Good and Simple Tax (GST) in letter, spirit, and compliance,” he said.
The government has been considering reforms to simplify tax slabs, reduce procedural burdens, and boost compliance. The proposed changes aim to eliminate the 12% slab, shifting goods and services to either 5% or 18%.